I am still not very clear about the nuts and bolts of how GST works, but from what I understand, here goes :

GST is being defined as a "consumption based tax" by the government. Basically, all the shopkeepers are supposed to upload their invoices to the relevant government website explaining the details of sales and the taxes.

There are many questions the department is facing from the shopkeepers e.g.
- If I buy 50kg branded rice from the wholeseller (taxed at 12%) and sell it in loose form (unbranded rice - 0%). What is my tax calculation in this case ?

- How to adjust for wastages/damages/expired goods ?

- What is the tax liability for the "sale" or "discount" schemes the retailer offers ? Suppose I keep a sale of 10 + 1, will my tax liability be for 10 units or 11 units ?

etc..etc..

Being new, its a bit of muddle right now, but will get ironed out in due time.

My personal opinion is that as long as the government controls corruption in the tax system, the inefficiencies/ shortcomings will get taken care of.

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Originally Posted by Napolean

Can someone explain how is it going to benefit India as a country? Also, is it going to somehow reduce tax theft?

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Originally Posted by Napolean

Thanks Bhidu.

The wayh whatspapp forwards are coming up , it seems GST is going to put a heavier load on consumers. How much truth is there in that?

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Originally Posted by Sane Less

Question (seriously) on this comment... how exactly will GST ensure that taxes are paid What is different that those who always paid cash will suddenly also include GST in their cash payments

There is a carrot and stick approach. According to the government, they know the flow of goods from raw material --> factory stage, and from there to the shops. Unless the end sale is accounted for, no one gets any "input credit". So your supplier is going to ask for your GST details for his own benefit.

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